Mortgage rates fall for the week of October 7, 2013

Posted by  on Oct 15, 2013
 

The government shutdown has held back some economic reports recently and is likely to skew some other reports as they trickle in, but the minutes from the September Federal Reserve meeting when it was decided to maintain the current Fed pace of bond-buying were revealing. It seems the Fed members were as split then as Congress is now, with one group pushing to end quantitative ending more quickly than the other group. The decision to wait, based on economic uncertainty, seems right in the context of the still unknown impact of the government shutdown and potential for government default if the debt ceiling isn't raised.

Mortgage rates reflect uncertainty over debt-ceiling debacle

According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan dropped by just one basis point (0.1 percent) to 4.42 percent, the lowest rate since late June. Average rates for 15-year fixed-rate mortgage loans also declined by just one basis point (0.01 percent) to 3.55 percent. Rates for FHA-insured, 30-year fixed-rate home loans rose by three basis points (0.3 percent) to an average rate of 4.07 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), declined by two basis points (0.02 percent) to an average rate of 3.18 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.

Economic news limited without government reports

Consumer borrowing rose again in August, following the same pattern as recent months with an increase in loans for cars and student loans offsetting a decrease in credit-card borrowing. Both the Consumer Sentiment report and the Bloomberg Consumer Comfort Index showed declining consumer confidence, not surprising given the uncertainty engendered by the federal government shutdown.

The mortgage experts at HSH.com anticipate that mortgage rates will likely stay the same this week, although once the federal government reopens there could be a slight uptick in mortgage rates.

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